October 31, 2014

Elyria
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Lorain acquires LCCAA mortgages

LORAIN – The third time was the charm Monday night as City Council authorized city administrators to use $325,000 from the city`s revolving loan fund to purchase two mortgages on buildings housing the Lorain County Community Action Agency.

Council voted 9-1 in favor of the ordinance that will allow Director of Public Service Robert Gilchrist to buy the loans from Texas lender FH Partners. Council had rejected two previous proposals from the administration to buy the loans.

“I`m relieved,” Gilchrist said. “When you are responsible for the retention and the expansion of business in your city, the retention of a business that offers a good service in your community is a good thing.”

William Locke, executive director of LCCAA, said he was happy with Council`s decision. The deal will lower LCCAA`s lease payments on 502 and 506 Broadway from $6,000 a month to $2,500 a month for 15 years.

“I`m glad that Council finally passed the business deal for us,” Locke said. “It benefits all concerned. When I came back on the board in November 2006, we worked on how to eliminate some of these hurdles.”

The city will hold the mortgages, and LCCAA will make monthly lease payments, Gilchrist said, adding the lease money will go back into the revolving loan fund used to finance the deal. The loans have a current value of $825,000.

Councilman Timothy Howard, D-3rd Ward, abstained from the vote and Councilman Craig Snodgrass, D-8th Ward, was absent. Councilman Gregory Holcomb, D-6th Ward, was the lone “no” vote.
Holcomb said he still opposes the deal.

“I`m not convinced this is a good idea from the concept of us buying possibly bad loans,” Holcomb said. “We`re not purchasing the buildings, even, we`re purchasing the loans. There are a lot of questions that aren`t answered, still, from the first time.”

Holcomb said the price dropping from the originally proposed $450,000 purchase price to $325,000 proves Council was right to reject the deal the first two times. He also would have liked to have some more answers about how the deal came about.

“Who came to whom?” Holcomb said. “No one`s been able to answer that. It kind of concerns me that we`re setting a bad precedent of going out and buying bad assets.”

Gilchrist disagrees.

“We`re buying a debt on this business at a deep discount,” Gilchrist said. “That means we`re keeping (48) workers here in Lorain, and we`re keeping another agency open and a building occupied downtown.”

In other business, Council passed a resolution expressing its opposition to the proposed relocation of the Lorain Unemployment Call Center from West Fourth Street to Akron or Richmond Heights. Mayor Tony Krasienko said the loss of income tax is not the only concern, but the loss of residents as well who don`t want the long commute. He urged everyone to write letters and call Gov. Ted Strickland`s office and urge state officials to keep the call center in Lorain.

“In these times, these are things we can`t sit back and take,” Krasienko told Council. “We`re going to fight for every job.”

Contact Alicia Castelli at 329-7144 or acastelli@chroniclet.com.